- 4 -
transfer from the Retirement System to the Pension System was
effective retroactively to the first of that month; i.e., to
November 1, 1990.3
The Retirement System is a qualified defined benefit plan
under section 401(a). The Retirement System requires mandatory
nondeductible employee contributions. The Pension System is also
a qualified defined benefit plan under section 401(a) but
generally does not require mandatory nondeductible employee
contributions. The State of Maryland contributes to both the
Retirement System and the Pension System on behalf of the members
of those systems. The trusts maintained as part of the
Retirement System and the Pension System are both exempt from
taxation under section 501(a).
In 1990, petitioner received a Transfer Refund distribution
(the Transfer Refund) in the amount of $216,616.26 on account of
his election to transfer from the Retirement System to the
Pension System. The $216,616.26 Transfer Refund consisted of
$32,151.31 in previously taxed contributions made by petitioner
and $184,464.95 of earnings.4 The earnings represented interest,
computed based on an annually compounded rate of approximately
3 For a discussion of the Retirement System and the Pension
System, see generally Hylton v. Commissioner, T.C. Memo. 1995-27;
Hoppe v. Commissioner, T.C. Memo. 1994-635; Hamilton v.
Commissioner, T.C. Memo. 1994-633; Maryland State Teachers
Association v. Hughes, 594 F. Supp. 1353, 1357-1358 (D. Md.
1984).
4 So stipulated.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011